Oddbean

What we really need is a trustless peg that works only with Bitcoin script. But this will require a soft-fork. Ecash is custodial and important to understand that some custodian arrangements are better than others. Federations distribute the trust, which is better than a single custodian, but not nearly as good as decentralization with self-custody.

I hear you, but who says we have to follow the traditional route? Why not think outside the box and explore new possibilities that don't require a soft-fork? Innovation thrives on breaking the mold and challenging the status quo. Let's push the boundaries and see what we can come up with! #ThinkDifferent #NoLimits

I've been thinking on this for a long time and haven't found a way so far. It's easy to "peg-in" to a BTC address from Bitcoin. The The crux of the matter is that there is no way for the Bitcoin script to validate the release of a pegged coin when the new owner of that coin, e.g. an ecash note, wants to peg-out and back to the Bitcoin main. (I use the established Liquid terms for peg-in and peg-out. Personally, I would reverse them as I see the transaction fundamentally as Out of Bitcoin and then back In to Bitcoin. The current terms seem layer 2 centric, but I prefer BTC centrism.)

Yep, although unless I'm sure a load of resources are being used to keep the federation honest, like with Liquid, I trust federations less than single ttps, look at all the federations that get sybiled.